PCM hints at European expansion as UK nears £50m revenue

CEO Frank Khulusi says reseller wants ability to work in Europe if UK-EU trade relations become strained

PCM has hinted that it may expand further into Europe after seeing its UK arm edge towards the £50m mark last year.

For the 12 months ending 31 December 2018 the wider PCM business reported flat revenue of $2.2bn, while in the UK sales hit $62.4m (£48.4m).

PCM's UK business, which launched in 2017, now equates to three per cent of the business' overall sales.

On an earnings call, transcribed by Seeking Alpha, CEO Frank Khulusi said that the reseller may look to move further into Europe after Brexit.

"It depends on what deal ends up being struck," he said.

"There has always been a wish on the table from both the EU side and UK side to continue to have very open trades, but we don't know what we don't know about where that's going to land.

"We hope that it's going to land in an area where we can continue to transact very openly within Europe.

"From a longer-term perspective, with respect to Europe, there are some things that we can do in Ireland, for example, and other places that will allow us to continue to leverage any opportunities in the rest of Europe. So we're not terribly worried about what happens."

Khulusi said he doesn't expect PCM to take much of a hit from Brexit, unless there is a "significant effect on the UK economy", because the majority of its European revenue comes from the UK.

PCM CFO Brandon LaVerne said he expects the UK arm's revenue to grow further once it has won places on public sector frameworks.

"Primarily, our ability to participate in the public sector component, which is a pretty significant piece of business in the UK as a start-up, has been muted due to the fact that we're not on the major contracts as I disclosed before," he explained.

"We are very busy trying to add our costs to those contracts, and we continue to expect that we'll be able to do so on a few. As that takes place our sales will accelerate there, although some of these sales will come at lower margins, so our margin will probably go down in that area of the business.

"Also from a corporate perspective, it takes a while to enter into contracts with the larger accounts, and we're making a lot of progress in securing some nice wins. So we continue to be very optimistic about that business, as we continue to watch what happens with Brexit very carefully."

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